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Economics Test – Thinking like an Economist
31. Which of the following will NOT entail an outward shift of the PPC?
a. an upgrading of the quality of a nation's human resources
b. an increase in the quantity of a society's labor force
c. the reduction of unemployment
d. the improvement of a society's technological knowledge
32. Assume that a change in government policy results in the increased production
of both consumer goods & investment goods. It can be concluded that:
a. the economy was suffering from unemployment and/or the inefficient use of resources before the policy
change.
b. the economy's PPC has been shifted to the left as a result of the policy decision.
c. this economy's PPC is convex(bowed inward) as viewed from the origin.
d. the law of increasing opportunity costs does not apply in this society.
33. In drawing the PPC we assume:
a. technology is fixed.
b. full employment and full production.
c. fixed quantities of economic resources.
d. all of the above.
34. If the PPC were a straight downsloping line, this would suggest that:
a. it is possible to produce more of both products
b. resources are perfectly shiftable(constant cost) between the production of these 2 goods.
c. both products are equally capable of satisfying consumer wants.
d. the two products have identical prices.
35. The law of increasing opportunity costs states that:
a. if society wants to produce more of a particular good, it must sacrifice larger amounts of other goods.
b. the sum of the costs of producing a good cannot rise above the current market price of that good.
c. if the prices of all the resources devoted to the production of goods increase, the cost of producing
any particular good will increase at the same rate.
36. Which of the following statements, if any, is correct for a nation which is
producing only consumption and capital goods?
a. CETERIS PARIBUS, the more capital goods a nation produces, the greater will be its future growth.
b. CETERIS PARIBUS, the more consumer goods a nation produces, the greater will be its future growth.
c. There is no general relationship between the current division of output between consumer and
capital goods and the future growth rate.
d. None of the above statements is correct.
List the four Factors of Production.
37. __________________________________
38. __________________________________
39. __________________________________
40. __________________________________
What are the two things that will shift the curve outward.
41.
42.
Use the following model to answer questions 43 – 50.